Australian-based gold miner Kingsgate Consolidated has settled proceedings against its Political Risk Insurers (PRI) by entering into a legally binding Heads of Agreement (HOA).

Kingsgate had a Political Risk Insurance Policy in place at the time it is alleged that the Government of Thailand illegally expropriated its Chatree Gold Mine in May 2016. (TAFTA Claim). Kingsgate’s lease for Chatree was due to run until 2028.

The HOA provides for a settlement to Kingsgate worth more than AU$82 million comprising:
•    A cash payment of US$55 million to be made to Kingsgate by mid-April 2019;
•    A requirement for the Insurers to contribute up to US$3.5 million of future costs towards the TAFTA Arbitration. The Insurers funding contribution will be paid on a pro-rata basis with Kingsgate; and
•    A sharing arrangement between Kingsgate and the Insurers for future distributions of TAFTA Claim proceeds.

Executive Chairman of Kingsgate, Mr Ross Smyth-Kirk said “I realise that it has been a long recovery process for our loyal shareholders, but this settlement transaction provides material upside for our Company, namely: Sufficient funds to pay out in full the Corporate Debt Facility; liquidity to give the Company time to maximise the value of the Nueva Esperanza project through further development or sale, and remain aspirational for other development opportunities.

“The Insurers’ pro-rata funding commitment under the HOA means that Kingsgate and the Insurers will be working together to fully prosecute the TAFTA Claim,” concluded Mr Smyth-Krik.

Source:  www.kingsgate.com.au